Airbnb usage showing steep climbs on Cape and Islands

Sunday

Jun 18, 2017 at 2:00 AMJun 18, 2017 at 6:32 AM

Sean F. Driscoll @SeanFDriscoll

Memorial Day was just shy of a $1 million weekend for homeowners on the Cape and Islands who use the vacation booking site Airbnb to rent their homes, an eightfold increase in the site's traffic in just three years — a sign that the company is making deep inroads in the local market.

Guest arrivals at Airbnb properties over Memorial Day weekend rose from 553 in 2014 to 4,573 this year, according to data the San Francisco-based company released last week. In the same time frame, host income rose from $135,000 in 2014 to $967,000 this year, a jump of more than 700 percent.

But company data shows that most of the local hosts on the site don't rent their homes full time, said company spokeswoman Crystal Davis. Instead, the majority of hosts on the Cape and Islands rent their properties only a few days a year and use the site to bring in extra cash to defray living expenses.

"Many of them are retired and don’t have the same stream of income where they were younger, so using an extra space in home to make their money to pay for their mortgage and bills," she said.

The meteoric rise in Airbnb's popularity locally comes as a statewide debate continues over taxing short-term rentals to match the taxes assessed on hotel stays. Hotels collect a 5.7 percent lodging tax on all stays, and municipalities can levy an additional 4 to 6 percent on top of that. All the towns on the Cape and Islands save for West Tisbury and Gosnold have opted to collect a local lodging tax, according to state records.

The tax would affect people who rent homes, apartments or rooms through online services such as Airbnb, HomeAway or Vacation Rental by Owner for less than 30 consecutive days. The state tax would be levied at 5.7 percent with a local option to add up to an additional 6 percent, a policy on par with the current Massachusetts state hotels tax.

Airbnb estimates that, if its transactions were taxed, Massachusetts would have received $15 million in revenue based on sales between Nov. 1, 2015, and Oct. 31, 2016.

In comparison, the state collected about $22 million in room occupancy taxes in May, according to the Department of Revenue; the revenue from the Cape and Islands Airbnb transactions over Memorial Day would have brought the state about $57,000 in tax collections, and a similar total that would be split between the 19 towns with a local lodging tax.

Cape Cod Chamber of Commerce CEO Wendy Northcross said she isn't surprised Airbnb is picking up market share locally, and said that businesses — particularly real estate agents, who have often served as the middleman between vacation renters and homeowners — began to feel the company's presence more acutely last year. But whether it's $1 or $1 million in revenue, she said the home rentals should be taxed the same as hotel stays.

"If that transaction is taxable for some, it should be taxable for all," she said.

Jeff Talmadge, owner of booking site WeNeedaVacation.com, said Airbnb's advance isn't reflective of an explosion in the local lodging market but more on the company's own push into new territory.

"They've pretty clearly made inroads," he said. "Our market has been pretty steady."

Shortly before Memorial Day, Talmadge said in a news release that bookings were running slightly below 2016 for the summer. However, June has brought a surge that has put the summer on par with last year's benchmark, he said.

See this graphic for company details about Airbnb

Although it's hard to ascribe a reason for the surge, he believes at least part of it is the large increase in the site's inventory of properties — a result, he said, of froth in the vacation booking industry that has sent host property owners to their site. HomeAway/VRBO, an Airbnb competitor, decided last year to join other vacation rental websites and require vacationers to pay them a fee when booking online in addition to the advertising fee they charge homeowners.

Talmadge said his site charges a flat fee to list a property and allows property owners to communicate directly with renters, giving the owners more control over who, ultimately, rents their home.

"It's irritated a lot of vacationers and a lot of the homeowners are feeling priced out," he said. "We've seen an unusual surge back to us. It's heartening, after 20 years in the business, that we've racked up a lot of good will."

— Follow Sean F. Driscoll on Twitter: @seanfdriscoll.

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